RBS profits plunge 59% as it sets aside $788 million to defend itself from the coronavirus pandemic

• RBS said it expects to take a hit of about $788 million to stem potential losses from the coronavirus pandemic, as its first quarter profits fell 59% on Friday.
• The state-backed lender intends to wind down its customer-facing digital account Bó, which was launched only last November.
• RBS joins a succession of other European lenders whose first quarter profits plunged as the coronavirus pandemic continues to hammer away at industry performance.
• Visit Business Insider's homepage for more stories.

Royal Bank of Scotland became the latest major lender to issue a coronavirus stricken set of first quarter results Friday, reporting a 59% fall in profits compared to the same time last year.

The state-backed lender posted a first quarter net profit of £288 million ($361 million), down about 59% compared to the same period last year, yet ahead of the £200 million ($251 million) average of analyst estimates compiled by the bank.

The bank also said it would set aside £802 million ($1 billion) as impairment charges, with around £628 million ($788 million) related to what it called the "uncertain economic outlook," referring to the anticipated fallout from the coronavirus pandemic.

RBS also announced Friday that it plans to wind down its customer-facing personal digital account Bó and instead integrate its technology into Mettle — the digital bank for small and medium enterprises — while it is developed.

"Although the outlook remains extremely uncertain, we approach the crisis from a position of strength, with confidence in our balance sheet and focus on our strategic priorities," CEO Alison Rose said.

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RBS said it would not undertake interim dividend payments or share buybacks until the end of 2020 and called attention to its concerns over uncertainty about the economy and how this position had "deteriorated sharply."

The bank had slashed more than 130 jobs in its investment banking division during the coronavirus crisis, the Financial Times reported earlier in April.

Here are some key metrics the bank reported for its first-quarter:

• Pre-tax profits: £519 million ($652 million) vs. £1.5 billion ($1.8 billion) last year
• Profitability based on return on tangible equity: 3.6% vs. 8.6% last year
• Core equity tier 1 (CET1) ratio: 16.6% vs. 16.2% last year

Other European lenders that had similar fates include HSBC whose profits halved in the first quarter, Swiss banking giant Credit Suisse's profits fell 75% and German lender Deutsche Bank's by 67%.

RBS' shares fell 6.9% in early European trading.

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